Market expectations were met when the US Federal Reserve (FED) announced a 25 bp rate hike, pushing Bitcoin into the green. The cryptocurrency hinted at bullish price action throughout the week as the Federal Open Market Committee (FOMC) closed in on today.
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At the time of writing, Bitcoin is trading at $41,300 with 5% gains on the last day. The price of BTC was able to break above this price point after a brief period of volatility as FED Chairman Jerome Powell began his intervention.
BTC posts slight gains after US Fed rate hikes. Source: BTCUSD trading summary
The price of BTC reacted to the uptrend and could continue this trajectory in the near term as the FED met market expectations.
In the medium term, according to according to Material Indicators (MI), the FED is projecting 7 rate hikes that indicate a possible aggressive approach to monetary policy. This could translate into headwinds for the price of BTC and the crypto market.
The US financial institution is determined to reduce inflation, which is currently at a multi-decade high. However, curbing inflation could prove difficult in the current macroeconomic environment with the war in Ukraine and supply chain barriers.
Bitcoin’s current price action is moving along with MI’s analysis. Analysts expect a rally in the near term, but are still hesitant to invoke a BTC’s price floor. MI shared the chart below, adding:
While Bitcoin has been testing the 200 MA on a 3-day chart since January and interactions with that range are rare, most traders view the 200 Weekly MA as a more valid level-to-bottom test.
Source: Material indicators via Twitter
Additionally, the analysts believe Bitcoin could resume a more sustained bullish trend if it is able to recover from previous lows and break above a new all-time high above USD 69,000.
Bitcoin in the long run, a war for global dominance
The war in Russia, inflation, supply constraints and the recent possibility for Saudi Arabia to accept the Yuan for oil transactions add to an already dangerous mix of uncertainty.
8/12 Now add the news that Saudi Arabia is considering accepting #Yuan instead of dollars for Chinese oil and you have an accelerator for more economic problems and market uncertainty. https://t.co/5by5PkH8Vf
— Material indicators (@MI_Algos) March 16, 2022
MI believes there is an ongoing war against the US dollar as a global reserve currency. Driven by Russia and China, this conflict could potentially escalate and lead to a “black swan event” like in 2020 when the crypto market responded to the COVID-19 pandemic.
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Bitcoin could become the best in a world where decentralized and uncensorable money is becoming a need for the global population. MI said†
The possibility of WW3 makes talking about trading crypto insignificant, but you need to plan and prepare for a Black Swan event. That means conservative risk management and capital preservation for what can be a life-changing, generative buying opportunity.